May Flowers, Part II
Market Report: 3 May 2019 — Subscribe to our newsletter.
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OUR TWO SATOSHIS
The daily view from our desk
Another bank holiday approaches, how will you spend it? Will you be lobbying to legalise nunchucks? Or will you try and sell some of Kanye’s grass? Perhaps you’ll be posing as a member of a Mexican cartel in order to extort your ring wing militia? Or maybe you’ve had a second thought about being a Russian spy and you just want to enjoy your life as a whale.
MAY FLOWERS — PART II
THIS WEEKEND ALL SCENARIOS ARE PLAUSIBLE
This is going to be a fun weekend! Regardless of the lack of showers in April, it seems May is indeed going to flower. Bitcoin has pumped 5.9% over the past 24 hours and is ruining the gains some alternative cryptoassets made recently. The real climb started around 7h30 AM BST, after the corn successfully retested the break of $5.5k — considering BitMEX’s prices, due to Bitfinex’s 6% premium.
As you can see in CryptoCompare’s chart below, this premium is dangerous because it’s a proxy for the problems the exchange is facing since the NYAG order. It occurs given that its users must convert their tether holdings to BTC if they want to quickly park them elsewhere, as Panda explains (you can also checkThe Economist if you don’t trust our favourite CT animals). Additionally, high withdrawal fees are also to blame. Which means an increase in said premium might scare investors and entice bears to bet against such bullish momentum.
TO WHOM IT MAY CONCERN — PART II
BUT IT’S DIFFICULT TO ASSIGN PROBABILITIES
On the bright said, the fact that the Tether premium has reduced means the market is only concerned with Bitfinex, as Alex Krüger analyses. Which means other exchanges who rely on Tether should be fine — we repeat, should be. As usual, caution is key. Almost everyone is uber-bullish — in particular given the report that the customers of Square, a US fintech company, are absorbing 11% of Bitcoin’s newly-mined supply every month — of which half is accounted for!
But, if it’s not clear to you by now, let us reinforce our point: this bullishness doesn’t necessarily represent the market doesn’t care about Tether, as many reputable publications are claiming. As Hsaka says, “this price action is insane, and the euphoria is sufficiently justified. However, we’re at a point where I’d start taking profits off the table instead of adding risk right now”. And look out for today’s daily close for clues of what might happen over the next week!
WHAT YOU CAN’T MISS TODAY
DON’T LEAVE FOR THE WEEKEND WHAT YOU SHOULD READ TODAY
▪ The Tether saga continues. Reginald Fowler, a US businessman indicted by the USAO on April 30th in a case indirectly connected to Bitfinex, might be detained.
▪ If you want to better understand the context of the banking problems Bitfinex is facing, check Decrypt’s article on the “Story of Crypto Capital’s dark past”.
▪ Meanwhile, to counter the bad news — or kind of as it’s not necessarily good news — check the latest update on Facebook’s new stablecoin: Project Libra!.
▪ For today’s must-read, Delphi Digital’s free monthly 10-page report outlining what happened this April in the world of Bitcoin is your place to go.
▪ Lastly, Multicoin Capital’s Tushar Jain announced the crypto fund’s threenew investment theses: open finance, web3, and stateless money. Summary here.
QUOTE OF THE DAY
BITCORN, NOT CROPCHAIN
““Man, Crypto Twitter is really bullish right now, I think I’ll short” — broke trader
I’m going to let you in on a secret: Crypto Twitter is bullish when price goes up and bearish when price goes down.
Majority of sentiment is a reaction to price movement, not in anticipation of it
- By Mr. Chief